Friday 8th April 2016

Dear Reader,

NEW ARTICLE
SFAT's red flag on Moody's chills negative research
We look at what the SFAT's ruling and the SFC's action says about the future of Hong Kong as a place in which freedom of debate and negative criticism is becoming increasingly difficult. (8-Apr-2016)

IN OTHER NEWS
HKTVN (1137) v Chief Executive in Council
HK Court of Appeal, 6-Apr-2016
The Court of Appeal overturns the First Instance ruling and holds that "no artificial limits" on the number of TV licences does not preclude the CE from adopting a limit in a "gradual and orderly" approach to avoid "over-competition, vicious competition or industry fallout". In our view, the court is wrong. When a Government decides a limit, that's artificial. When the market finds a limit through competition, and when some players succeed and others fail, that's natural. Whatever next - a limit on the number of newspapers to prevent "over-competition"? Ironically, ATV failed anyway, despite Government efforts to protect it from "industry fallout".

Concentration warning in Vinco Financial (8340)
SFC, 6-Apr-2016
At 31-Dec-2015, the company had net tangible assets of HK$23.4m of which 92% was cash. It's market value tonight is HK$755.2m.

SFC takes Yorkey (2788), its CEO and FC to MMT for late disclosure of inside info
SFC, 6-Apr-2016
Notably the action is not against the other directors. The implication is that they didn't know the business was deteriorating, because they were not provided with the monthly management accounts. In our view, that omission in itself is poor governance.

Re Yee Tsim Choi and M Success Finance Ltd
HK Court of First Instance, 30-Mar-2016
The plaintiff and defendant are presumably Yee Tsim Choi and M Success Finance Ltd respectively, although the judgment omits to say so. Judge Anderson Chow rules that the defendant's attempt to register an unsecured loan (to the plaintiff's ex-husband) against the property at the Land Registry is "totally unjustified" and orders it removed. The lender is a subsidiary of Roma Group Ltd (8072).

Ex-Tom Lee teacher admits accepting illegal rebate over purchase of harp
ICAC, 29-Mar-2016
Lai Kam Kit decides to face the music rather than let them harp on about it. Her co-defendant Tse On Kei will be tried in June for allegedly fiddling a violin purchase which had strings attached.

Eric Sun Yung Tson inherits INED seat at Ming Fai (3828) from his father
Company announcement, 29-Mar-2016
Sun's son rises, presumably after an exhaustive search by the Nomination Committee.

John Poon Cho Ming v Commissioner of Inland Revenue | Resignation announcement
HK Court of First Instance, 24-Mar-2016
Mr Poon loses his appeal. The judge writes "On 20 July 2008, apparently due to disagreements within the Company's board of directors, the Taxpayer's employment and offices with the Company came to an abrupt end." That's not what Esprit told the market the next day: "Mr Poon has confirmed that he has no disagreement with the Board...". We call on the SFC to investigate whether this statement was false or misleading. Mr Poon is Chairman of the Financial Reporting Council.

HKSAR v Theodore Cheng Chee Tock
HK Court of Final Appeal, 21-Mar-2016
The late Mr Cheng wins his final appeal. Our take: the Government, represented by Nicholas Cooney SC, shot itself in the foot by disavowing reliance on Listing Rule 1.01, which defines a connected person to include companies such as SSI which are 30% or more controlled by a director of the listed issuer. This really is Listing Rules 101.

Trolley folly: Ms Lo Wai Chi guilty of HK$1m Hospital Authority contract fraud
ICAC, 18-Mar-2016

Re David Perry QC
HK Court of First Instance, 18-Mar-2016
The senior British barrister is refused admission to represent Clarea Au Suet Ming and her firm in an appeal in the Court of First Instance.

And much more besides...
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